As big boys form alliance, writing is on the wall for small players

For over three decades, observers in higher education have witnessed an increasingly challenging landscape, particularly in the United Kingdom and Malaysia. In the UK, the Office for Students predicts that 43% of institutions may face deficits in 2025-26, with 24 potentially closing within a year. Mergers are already occurring, such as the formation of the London and South East University Group by Kent and Greenwich universities.

In the US, analysis by EY-Parthenon identifies 442 vulnerable private nonprofit colleges and universities, with about 26% of over 1,700 institutions expected to close or merge within a decade, serving around 670,000 students.

Japan's demand for university places could drop to 460,000 by 2040, representing only 73% of current capacity, with more than 40% of private universities operating at a deficit. In Malaysia, a decade-old research highlights risks, with public and private institutions enrolling around 1.3 million students, of which 160,000 are international, or 12.3%. However, this number has dropped from 436 private institutions in 2019 to 371 in 2025, reflecting mergers, changes in status, and registration adjustments.

The primary causes are demographics, costs, and the gig-economy opportunities, with artificial intelligence (AI) set to accelerate the crisis. As students gravitate towards cheaper, flexible learning models not reliant solely on traditional knowledge delivery, institutions with strong finances, distinctive programs, industry partnerships, and personalized learning may survive.

The Triple Alliance between Sunway University, Monash University Malaysia, and Taylors in Bandar Sunway aims to tackle these challenges by pooling resources to strengthen Malaysia's position as a regional talent and innovation hub.

Resource pooling enables the three universities to explore joint research grants, share facilities, and launch cross-institutional programs. This approach aligns with Malaysia's development goals in high-value sectors such as AI, digital, health, and sustainable technologies, attracting regional talent and industry partnerships while generating sustainable revenue and cost efficiency.

However, this consolidation also poses a challenge to smaller private universities, who must form smart alliances, mergers, and takeovers to survive. Despite previous warnings, this trend is now evident as institutions adapt to an evolving market landscape.